Explanation Approach: Discrete division of items: The items/goods being divided cannot be split into fractional parts Continuous division of items: The items/goods being divided can be split into the required fractional parts. In the method of sealed bids, 1. Each person analyses the worth and submits a bid on each discrete division of item. 2. Each item goes to the person whose bid is the highest for that item. 3. A person’s fair share of an estate is the product of estate value estimated by the person and the percentage or the fractional part of the person’s share in the estate. If each person gets an equal share, the person’s fair share of an estate is Estate value estimated by the person Number of person sharing equally . 4. Then each person pays/receives money such that they all have their fair share. 5. Finally, the surplus or remaining money is divided equally among them. Given Information: Two person, Karl and Friedrich, bids on their father copy of a rare book. Karl’s bid on book is $27, 000 and Friedrich’s bid on book is $35, 000. Calculation: From the given information, Karl has estimated the value of the book as $27, 000 and Friedrich has estimated the value of book as $35, 000. In this problem, Friedrich’s bid is higher than Karl’s bid. Hence, the book goes to the highest bidder, Friedrich. The number of persons sharing equally is 2 (Karl and Friedrich). That is, each person gets 50% or 1 2 parts of the share

6th Edition

ISBN: 9780134434681

Author: Tom Pirnot

Publisher: PEARSON

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Chapter 10.4, Problem 4E

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To Complete:

The following table using the method of sealed bids.

Karl (12) Friedrich (12)

Bid on book $27, 000 $35, 000

Fair share of estate a. b.

Item obtained with highest bid c. car d.

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Chapter 10.4, Problem 3E

Chapter 10.4, Problem 5E

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The following table using the method of sealed bids. Karl ( 1 2 ) Friedrich ( 1 2 ) Bid on book $27, 000 $35, 000 Fair share of estate a. b. Item obtained with highest bid c. car d.

Solution Summary: The author explains the method of sealed bids: each person analyses the worth and submits a bid on each discrete division of item.

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To Complete:

The following table using the method of sealed bids.

Karl (12) Friedrich (12)

Bid on book $27, 000 $35, 000

Fair share of estate a. b.

Item obtained with highest bid c. car d.

Want to see the full answer?

Chapter 10 Solutions

	Karl (12)	Friedrich (12)
Bid on book	$27, 000	$35, 000
Fair share of estate	a.	b.
Item obtained with highest bid	c. car	d.

The following table using the method of sealed bids. Karl ( 1 2 ) Friedrich ( 1 2 ) Bid on book $27, 000 $35, 000 Fair share of estate a. b. Item obtained with highest bid c. car d.

Solution Summary: The author explains the method of sealed bids: each person analyses the worth and submits a bid on each discrete division of item.

Concept explainers

Videos

To Complete: The following table using the method of sealed bids. Karl (12) Friedrich (12) Bid on book $27, 000 $35, 000 Fair share of estate a. b. Item obtained with highest bid c. car d.

Want to see the full answer?

Chapter 10 Solutions

To Complete:

The following table using the method of sealed bids.

Karl (12) Friedrich (12)

Bid on book $27, 000 $35, 000

Fair share of estate a. b.

Item obtained with highest bid c. car d.